York Liberal Democrats

Grant Settlement for York - LibDem reaction

Councillor Steve Galloway, Leader of City of York Council

"Disappointing" is how local Council Leader Steve Galloway describes Thursday's grant distribution announcement by central government.

The announcement confirms that there will be no change to the distribution formulae. York's hopes were pinned on persuading the government that additional costs incurred in the City, for example as a result of high housing prices and the wear and tear caused by 4 million visitors, would be recognised. But hopes have been dashed.

The extra £6.5 million that the City will receive - along with all other authorities - is slightly more than the "worst case" scenario that Council officials have been working on. About £3.8 million of the increase has been ring fenced for education and the rest will be more than taken up by the normal inflation pressures (pay, prices and increased interest charges).

"This leaves us nothing to cover, for example, the extra £1.3 million costs of waste disposal - a cost which is the direct result of a central government decision to impose punitive taxes at landfill sites. So the local taxpayer will be hit again".

Other major additional - above inflation - costs likely to be incurred by the York Council include:

· Costs arising from equal pay legislation

· Shortfall in income resulting from the introduction of lower parking charges

· Cost of highways materials

· Replacement of obsolescent computer equipment (replacing systems no longer supported by suppliers)

· Loss of direct grant to Social Services

· Increased population of elderly people and those with complex needs.

However, the Council has been very frugal in its use of its contingency fund this year and as a result some could be carried over to help reduce the tax demand in 05/06.

Despite some claims, the Council has had a very successful campaign to encourage less well off residents to take advantage of Council Tax benefits. There are around 7.5% more claimants now than a year ago (one of the reasons for the delays experienced by the Council in dealing with applications earlier in the financial year).

In addition, Liberal Democrat Councillors have been trying to get more eligible pensioners and disabled people to claim attendance allowance. This campaign has been successful and as a result part of the increasing income to the City relates to the higher than average number of residents now claiming this allowance.

Senior members are working with officers to produce a balanced budget. Around £4.5 million in efficiency savings have already been identified. Residents will be consulted before Christmas on the options for dealing with the remaining budget gap of nearly £3 million.

If the Council Tax rise is to be restricted to 5%, then substantial cuts in service quality would be necessary. At 10%, service quality could be maintained. A compromise figure of 7.5% will also be an option for residents to consider.

Steve Galloway said today;

"This settlement does not address the fundamental unfairness of both the Council Tax system - which is not based on people's ability to pay - nor the relatively poor deal that York receives compared to other Cities".

"Council Tax is a bad tax - unfair and grossly inefficient. M.P.s love talking about how people's homes have increased in value - but ask them about what that means for their council band re-valuation and there is an uncomfortable silence. Revaluation is going to be the New-Labour version of 'wealth re-distribution' from those whose houses go up a band and pay more to those in the top bands who can't go any higher - who ever heard of trickle-up? In York many residents could face a 12 - 25% hike in tax payments simply as a result of revaluation. Some rises could be as high as 40%. When the truth about re-valuation dawns on people, their reaction will be one of horror.

I the meantime we will be redoubling out efforts to get a "Fair Deal for York" and we will leave no stone unturned in our quest for even more efficiency savings"

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Notes:

This year:

· York has the 10th lowest Council Tax in the country. It is the lowest outside the south east of England

· York receives the 4th lowest grant from central government of any unitary authority in the country

· York spends less per head of population than any other Council in the country

· York is independently rated by central government as providing "good" quality Council services.

· The combination of good service quality and low costs make York one of the 2 most efficient Councils in the country.

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